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Historic renovation money salvaged?

Ohio
Published 6:21 p.m. ET June 12, 2015

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Ron Sutphin, with Chelser Construction, runs electrical wiring for a ceiling fan at the Carlisle Building in March. The Carlisle work would be exempt from any elimination of the Ohio Historical Preservation Tax Credit proposed by the state Senate because the work is already ongoing.(Photo: Gazette file photo)Buy Photo

COLUMBUS – Arts activists panicked Thursday fearing that millions of dollars for historic renovations would be axed in the biennial budget, but Statehouse Republicans say they have nothing to fear.

Developers who fought in intense competitions for the money were mystified that senators had slipped a couple of lines into the two-year state budget to eliminate the Ohio Historical Preservation Tax Credit. Statewide, 238 projects totaling $482.3 million have benefited from the historic preservation tax program since 2007.

One of those, the Carlisle Building renovation in Chillicothe, is scheduled for a fall completion and reopening more than 12 years after fire badly damaged the historic structure.

Projects are promised money to rehabilitate empty historic buildings, then reimbursed after the work is completed and inspected. The Senate proposal to cut off money July 1 would throw hundreds of renovations and more than $260 million into limbo.

But Senate Republicans will change their proposal so existing projects like the Carlisle work don’t lose money, spokesman John Fortney said. Still, no new money would be awarded for historic renovations between July 2015 and July 2017 if the measure was to make it through the budget process.

“Existing projects already approved won’t lose their funding and the program will continue after the moratorium,” Fortney said. “The historic renovation credit isn’t as efficient as it should be, because it doesn’t direct as much money to renovate historic buildings as a grant program would.”

Senate Republicans have proposed replacing the tax credits with grants starting in July 2017. But grants would have to be reapproved every two years, developers said, making them an uncertain source of money. Predictability is key to economic development, said Joyce Barrett, executive director of Heritage Ohio, which supports historic preservation across the state.

Chris Manegold, CEO of the Economic Development Alliance of Southern Ohio, agrees that developers look for stability before moving forward with a project. The Carlisle project is a perfect example, with The Chesler Group out of Cleveland making sure it secured about $2.8 million in state and federal historic tax credits and an anchor tenant – Adena Health System – before proceeding with the work.

“You can get the federal tax credit, and I think that was more demanding in terms of the standards, but every last dollar that was basically thrown into that (Carlisle) project from one source or another is really what made it work – the margins were razor thin,” Manegold said. “If JobsOhio had not come along with a million and a half dollars that they did, that project would not have occurred.”

What’s hard to argue is both the psychological and economic impact on a community that projects utilizing the tax credits can have, Manegold said. The promise of the Carlisle restoration has helped spur an influx of new business activity downtown in anticipation of the arrival of as many as 30 medical students who will occupy apartments in the building and will look for places to eat, shop and unwind within walking distance.

While the tax credits awarded to the Carlisle will be protected, any future elimination could have an impact on funding for other projects, including any renovation of the Howson Building or the Majestic Theater.

Democrats proposed a different amendment Thursday to return the money to projects and to preserve construction jobs, they said.